"When Google bought Motorola Mobility for $12 billion last summer, the company told press, shareholders and partners that it made the purchase for Motorola's patents.

That's true.

Google got a great price for Motorola's patents, which well help protect the company from lawsuits that otherwise might have been crippling.

Google also said that it will not give Motorola favorable treatment, and that it will have to fight for Google's business like all the other third-party manufacturers of phones running Google's mobile operating system, Android.

Google continues to say that there will be a firewall between Motorola's - let's be real and call it Google's - handset hardware development and Google's handset operating system development.

But here's the truth, according to a person briefed on Google's plans for the merger: while Google may have originally wanted to buy Motorola for its patents only, it has come to realize that it wants to follow Apple's lead when it comes to smartphone and tablet computer development. A second source, also briefed on Google's plans for Motorola, confirms this is true.

(Both sources declined to comment because each would like to continue being briefed by Google on its plans.)

Google now wants to design smartphone hardware, software, and make the sale.

To be clear: Google's ambition is not another Nexus One, a third-party manufactured smartphone it helped design from the ground-up in an effort to show all that Android could do. Google wants to do more. It wants to have its own iPhone business.

Whether Google will actually be able to pursue this plan, over the furious objections of some partners, is still up in the air.

The third-party companies that already make Android phones - Samsung and HTC lead the way - are slowly realizing Google's intentions, and they are furious.

An executive who met with one of these manufacturers and tells us that every single conversation during this meeting ended back at the same point: anger and dismay with Google.

There is a chance that the companies that make Android phones will be able to band together and demand that Google sell Motorola's handset business.

There is a model for this kind of stand against Google.

Motorola Mobility's other big business is manufacturing set-top cable boxes.

After acquiring Motorola for its patents, Google's plan for this business evolved to the point where Google realized it wanted to stay in the cable box business after the merger. Google TV was a flop, and Google wants to win in the living room.

Executives from several of the top cable system operators - called MSO in industry lingo - caught wind of this plan. Then something strange happened. Facing a powerful external threat, these executives banded together, called Google and threatened war unless Google agreed to back down and sell the cable-top business as soon as possible. The threats worked, and Google's revised plan is to spin the cable top business off.

The smartphone manufacturers that make Android phones could follow this strategy. But so far, they aren't talking, and Google's merger is one regulator's approval (China's) away from closing. Insiders expect that third-party Android phone-makers - which are incredibly diverse in size, strategy, and geography - will not form any sort of alliance in time to force Google to sell the handset business. These people assume that Google won't see any fallout from its plans to copy the iPhone business model until it actually does.

What will that fallout look like? Obviously, no one knows. But some speculation seems compelling: Expect a lot of Asian smartphone makers to start developing phones for Windows 8. "

"Google is planning to directly challenge Apple with an in-house smartphone and tablet business built on Motorola Mobility's manufacturing heft, insiders claim, evolving the Nexus program into a true, own-branded range of Android hardware.

Although it originally saw Motorola as a patent source, so two sources tell Business Insider, Google "has come to realize that it wants to follow Apple's lead when it comes to smartphone and tablet computer development." However, it faces growing resentment from Android OEMs. "

"According to Business Insider, Google has bigger plans for Motorola than just hoarding Moto's patents. BI is saying Google now wants to use Motorola's team to create its own Google smartphones and tablets. Meaning Google doesn't just want to develop another Nexus One, it wants to make its own iPhone. And that would be a very, very bad idea.No One Would Be Happy

Once upon a time, if Google decided to make its own phone hardware and control its own software, it would've been seen as smart. Hell, maybe even romantic. Aww, the colorful company taking control and making its own phones for its scrappy mobile OS. Not anymore. Doing that now would end up poorly for pretty much everyone. Yes, Android has its fair share of problems (hello, fragmentation!) that streamlining with one partner could help address (in a hail mary-ish sorta way) but isn't that the purpose of Nexus already? The Nexus phones serve as the reference phone for Android and it doesn't piss anyone off. A compromise that Google's already come up with!

Right now, Android is bigger than anyone ever imagined it could be, and has become the perfect antithesis to Apple's boring iPhone. You want options? Android got options. You want to tweak your phone? Android welcomes it. This is your phone. There are many that look like it, but this one is yours. That's Android. You can make it more yours than any other phone.

If Google decided to turn to Motorola for its own hardware needs, that would mean Google is turning its back on all of its current hardware partners. Becoming their competitor, not collaborator. Why alienate Samsung? Why make HTC question its loyalty? It's like cheating on an exorbitantly rich spouse who handles all the bills and finances who's also a wonderful person and does exactly what you want it to do and keeps you free from any and all stress. You're doing ridiculously well by letting your partners make the hardware. Keep them happy. "

Apparently Google wants to manufacture it's own phone and tablets - but intends to sell-off the Motorola set-top business. I would love to see a Google TV hardware device manufactured by Google. Hopefully they will still have a Google branded GTV through a third party hardware manufacturer. Kind of like what they did with the Nexus phone.

IMO GTV will continue to struggle if it's undercut in price from Apple TV and Roku. Granted IMO Google TV is a better product (for those that understand it) - but for the general population "price" is a major issue.

In general, a company can either have a better product or a product that costs less, it is very rare the better product also costs less. I don't think a Google TV box with HDMI overlay can be competitive in price to a product that doesn't have HDMI input and processing of that input. A simpler version without that feature, maybe it can be priced competitively with the cheap boxes but I don't know if that can be called Google TV. The Roku LT and the Netgear NeoTV are priced at about $50.

I think that if Google TV is going to be a success at "relatively" high prices - along with product improvements Google will have to do a better job of advertising. I didn't see much advertising for the first round of GTV hardware.

Now a new wrinkle that has come along - are the problems that Best Buy is having. They will be downsizing their stores - and concentrating more on mobile and tablets (and less on big televisions). For example there is no mention on if the new LG GTV television will be available at Best Buy - all the articles only mentioned it's availability on Amazon.

IMO Google TV is a bit more complicated than Apple TV & Roku - and to get a good feel for it -those not already familiar with it will need to see it displayed and explained on a showroom floor. This would especially be true for a $2000 GTV television. So if the trend is going to be more TV's carried online and less in Best Buy showrooms - then Google will have to spend a lot more on advertising to make the GTV televisions a success.

"Google should complete its acquisition of Motorola Mobility in the next few weeks, but the company has provided little detail about its plans for the company, leaving the industry scratching its collective head about Motorola's future. A newly published report from Ovum reviews Motorola Mobility's smart devices strategy, and attempts to answer two key questions: what might Google do, and what should Google do?

In short, the answer to what Google should do is: incorporate some key elements of Motorola's value-add into Android itself, make use of Motorola's set-top box relationships to pursue the carrier and operator channel for Google TV, resist the urge to make Motorola the channel for future Nexus devices, and allow Motorola to continue to differentiate without favouritism.

All of that requires some nuanced decision making on behalf of Google, and none of it is straightforward. But Google is acquiring a valuable set of assets which could help significantly in several key strategic areas if it gets them right. "